Ghana’s inflation rate dropped to a record low in May, defying targets set by the central bank and economists.

Consumer inflation in the West African nation fell to 7.5% from 8.5% in April, Samuel Kobina, Government Statistician told reporters in Accra. Prices climbed 0.8% in the same month.

“Last month we saw food inflation was a strong contributing factor … around 50% to overall inflation, but since April 2021, we’ve seen its contribution drop to around a third,” Kobina said.

The slowdown brought inflation below the midpoint of the official target band of 6% to 10% earlier than the central bank projected. The country’s monetary policy committee said last week the rate will be close to 8% by June.

Central Bank Governor Ernest Addison also announced a cut to its benchmark interest rate to the lowest in more than nine years to support the recovery of the economy, despite cost pressures from a new tax regime and a 13% increase in transport fares are yet to reflect in price data.

Last year the inflation rate in Ghana was above 11% at the peak of the pandemic and movement restrictions. The fall in inflation has been driven by a stable exchange rate. Economists expect the monetary policy committee rate to remain on hold for the rest of the year should inflation rise in subsequent months.

Food-price growth, that helped to keep inflation above 10% for most of last year, slowed to 5.4 % from 6.5% in April. Non-food inflation was 9.2%.

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